Please help with this problem and explain why 26) A company sells 2 types of pie

Question

Please help with this problem and explain why

26) A company sells 2 types of pies - blueberry pies and apple pies. The constrained resource in the production of pies is the number of minutes it spends in the oven. Given the below data, which of the following is true? Blueberry pie S45 $15 120 Apple Pie Sales price Variable costs Minutes needed in oven $30 30 a. The apple pie is more profitable b. The blueberry pie is more profitable c. Both pies are equaly pofitable d. Putting the blueberry pie in the oven for 120 minutes would probably burn it. e. None of the above

Explanation / Answer

Apple pie Blueberry pie Sales price 30 45 Less: Variable costs 20 15 Unit contribution margin 10 30 Minutes needed 30 120 Contribution margin per minute 0.33 0.25 Option A the Apple pie is more profitable is correct as it has more contribution margin per minute.

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